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Jenny
Jenny, Solicitor
Category: Law
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Experience:  Qualified Solicitor specialising in Employment Law and general legal matters. Please start your question For Jenny Only
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An employee on a zero hours contract accrues holiday benefit

Resolved Question:

An employee on a zero hours contract accrues holiday benefit at 28/232 of hours worked. If that benefit arises before a pay rise and is paid after the pay rise, must the payment amount be calculated on their old or their new hourly rate?
Submitted: 1 year ago.
Category: Law
Expert:  Jenny replied 1 year ago.
Hello Pete my name is ***** ***** I am happy to help you today. Are they asking for pay in lieu in this situation?
Customer: replied 1 year ago.
Yes, they are asking for ££ (as opposed to time off).
Expert:  Jenny replied 1 year ago.
Hi sorry for the slight delay I just wanted to double check the position. Has the persons contract come to an end and did they work variable or fixed hours during the week?
Customer: replied 1 year ago.
Their contract is not ending. They continue to work for me. Variable hours, depending on the requirements of the business and their own availability.
Expert:  Jenny replied 1 year ago.
If they work variable hours then the rate of holiday and the rate that it is paid at is calculated on an average of the previous 12 weeks. This would mean that if it is a recent change in pay rate it would be mainly paid at the old rate. If you have any further questions please do ask. If I have answered your question I would be grateful if you would take the time to rate my answer, thank you and all the best.
Expert:  Jenny replied 1 year ago.
Hello Pete is there anything further you would like to know as I can see you have not yet rated my answer which is an important part of the process?
Customer: replied 1 year ago.
Sorry - was mulling over your reply. Your: "the rate of holiday ... is calculated on an average of the previous 12 weeks." appears to be unnecessarily complicated when faced with "real-life" figures. I had expected to determine the employee's holiday hours entitlement by entering their total hours worked into the HMRC calculator at webpage https://www.gov.uk/calculate-your-holiday-entitlement/y/casual-or-irregular-hoursMy original question here was just what hourly rate to use for payment in lieu of this entitlement. Your: "the rate that it is paid at is calculated on an average of the previous 12 weeks" answers that.If there is anything wrong with my proposed above strategy, please let me know. If all looks OK to you I will close this item and rate your answer. Please let me know.
Expert:  Jenny replied 1 year ago.
Hi I am sorry if you feel that the 12 week average is an unnecessary complication. Unfortunately it is a statutory requirement where hours are not the same each week and could result in a claim if it is not calculated properly. If there are any further questions please do ask otherwise please take the time to rate my answer as I am not otherwise credited for my time.
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